A N O T H E R ● L E A K —Aurora confirms it has breached standards over the average amount of time power has been cut per customer after its data was leaked to the Otago Daily Times.

### ODT Online Sat, 11 Mar 2017Aurora fails reliability for third year
By Vaughan Elder
Aurora Energy could be fined or face court action after breaching a limit on power interruptions for the third year running. The Dunedin City Council-owned company said it took the breaches “seriously” and would probably ask the Commerce Commission to relax its reliability standards. If the Commerce Commission agreed, Aurora would be only the second lines company to operate under relaxed standards under a system called a customised price-quality path. The only other company to operate under such a system was Orion, after its infrastructure was damaged in the Christchurch earthquakes. Meeting the standards is important because the Commerce Commission takes into account liability when setting limits on how much lines companies can earn. …[Aurora] would not be drawn over whether a lack of investment had contributed to the breaches. […] A Commerce Commission spokesman said it was not aware of the reported breach as Aurora was not required to provide the information until June. However, if Aurora had breached standards its response could range from warning letters to administrative settlements and court proceedings. It could also penalise Aurora by cutting up to 1% of its revenue.Read more

This latest announcement from DCC requesting that Aurora should be exempted from regulation around the reliability of its network is astonishing.

Only once has an exemption been granted for a lines network’s unreliability, and this was to Christchurch’s Orion Network after two unavoidable natural disasters – the catastrophic quakes.

And the cause of Aurora’s unreliability . . . wilful and protracted, systemic neglect of the maintenance of its network, driven by a ‘run-to-fail’ policy where pole rot, steel corrosion, insulator and HV cable disintegration, and an appalling executive attitude to safety of its personnel and the public was the modus operandi.

This is certainly a full-scale disaster for the Otago ratepayer owners of the network, but it was totally avoidable, and it was driven by both governance and management strategies which were designed to divert / misappropriate revenues from essential network maintenance to the new ORFU stadium. All documented fact.

I expect that the Commerce Commission (even with Mr Crombie sitting in as an ‘associate member’), will give the DCC a suitably apt DCC grading for reasons around their latest exemption request.

Nick: “…DCC requesting that Aurora should be exempted from regulation around the reliability of its network….”
“Hey guys, good news. The Big Boss says near enough’s good enough. Relax! It’s beer o’clock now!”

Predictably it was praised. But did the DCC owned trading company DVML (that’s us indirectly) see a return on the trade generated by the investment? Well the article does contain the following passage containing relevant content from ‘Our Tel’:

“It was the first time the organisation had hosted a cricket test.
He (Tel) declined to say whether DVML made a profit on the event, but said the test had showcased the city and built confidence with New Zealand Cricket for future events. DVML needed to drive economic impact and promote “pride of city”. To have 10,000 people turn up to watch the test and have Dunedin “beamed into millions of homes” was publicity that could not be bought, Mr Davies said. “Any city around the world would love to showcase themselves like that.” Making a profit was “not anything to do with it” “We run it as we’re securing an event for the city.”

We have moved a long way from Farry’s initial position when launching the supposedly profitable Foobar project that spawned DVML when the current CEO is stating that profit has “not anything to do with it”. I do not recall DVML being set up as a ‘regardless of cost or anything else’ economic impact generator – do you?

Working on the assumption that had a profit, or something that was fiscally massagably close to it, been made by DVML at this event, then it would have been well banner headline trumpeted, we can only make the Clintonesque observation that it all depends on how you interpret what ‘It’ is… Is the ‘It’ that now has nothing to do with profit from the Test, the University Oval or all of DVML’s activities?

Perhaps in light of several possible interpretation of ‘It’, and the general position that this event turned out as its backers expected or better, this passage might reasonably be interpreted as – We lost a load of ratepayers money and planned it to be that way – and we plan on losing a lot more ‘going forward’.

The further comment:

“DVML chief executive Terry Davies said almost 10,000 people attended the four days of test cricket, 2000 more than expected.”

Might be further reasonably interpreted as: We actually planned to lose even more this time around, but we (and thus you) got lucky.

This ‘carry on’ has serious implications for the City. It is now clear that the destruction of Delta/Aurora has not slowed current and projected non-essential ratepayer-funded spending plans of this nature one iota. I do not think that planting pretty lots of coloured grass on the reverse side of the Oval’s banks can in any way be described as essential for either profit or economic impact… If further proof of this was necessary, then another article in today’s ODT simply confirms it:

“The development of Dunedin’s waterfront is back on the agenda, fuelled by a new vision of the area’s future from Architecture Van Brandenburg. The award-winning Dunedin-based architectural firm has developed a model showing what a redevelopment of the city’s waterfront could look like. It is understood the model includes a bridge to the harbourside and other links to the central city, as well as developments and public space around Steamer Basin.

The company’s staff were not keen to discuss their work with the Otago Daily Times when contacted on Friday, saying the project remained “confidential” for now.

However, the model has grabbed the imagination of top staff at the Dunedin City Council, as well as key waterfront landowners the Otago Regional Council, Port Otago and its subsidiary, Chalmers Properties.”

Another ‘confidential’ project that has ‘grabbed the attention’ of the DCC’s ‘Top Staff’. Now why do I not think that this group includes our elected representatives, or us… and why do I think that the ratepayer is going to end up footing most of the infrastructure bill if it goes ahead? One might reasonably assume on past form that the financial aspects of this model will remain ‘confidential’ until our elected representatives are presented at the end of a sustained public ‘build it and they will come’ campaign with a vague, partially redacted but big budget plan with no alternatives, no third party review and 15 minutes to absorb it before the meeting where the binding public money committing vote will take place.

I am surprised that this model has succeeded in grabbing the imagination of top staff at the DCC. One would have thought that at present their fertile imaginations would be fully deployed in the novel area of developing real plans to rectify the current infrastructural and fiscal mess within DCHL/DCC, or failing that, along the more established lines of thinking up new ways to disguise it.

One can only suppose that, now that the community’s golden geese have been not only killed but disemboweled, that these ongoing planned losses can now only be funded by even more systematic and widespread strategic neglect of the already neglected basic and critical infrastructure within this City and its surrounding areas. The cash thus ‘saved’ by these ‘efficiencies’, then being used to fund these ongoing florid activities.

The preposterous suggestion that the Commerce Commission relax its already quite relaxed delivery standards to accommodate Aurora, for no other reason than that Aurora has systematically neglected over several decades the very assets upon which that delivery depends in order to fund these frivolities could be quite reasonably interpreted as a clear signal from the very top of that very intent.

“I am surprised that this model has succeeded in grabbing the imagination of top staff at the DCC.”
Rob, you aren’t really though. You know as well as I do, they’re fans of money’n’power fantasy movies, novels, video, and roleplay.

Rob, I read the ODT stories with increasing incredulity until I got a good grip on myself and remembered that nothing, repeat nothing, would ever be a surprise when it comes to a few frittering away any hopes of turning Dunedin’s fortunes around.

Terry Davies had a role which was widely reported as making money for the Council. He isn’t. And his public excuse for not doing so is that holding a cricket test at the University Oval brought untold wealth to the City by means of exposing the venue to those that happened to be watching on TV. What ratepayers actually need is cash and not Terry Davies’ view on what wealth is.

It appears that the only return to Dunedin is some form of intangibles which no doubt will now be valued by an anonymous analyst as being worth a little more than the country’s GDP. The cost of running it will be forgotten and ignored.

And now the waterfront “confidential” project rears its ugly head again. Have people forgotten Jimbo’s foray into governance when he came up with the last plan? First thing he did was to bring Malcolm Farry in to explain to a series of workshops his vision of canals, latte outlets, thousands sauntering under Mediterranean skies looking out on hundreds of big yachts moored in the Steamer Basin bestrewn with bikini clad models. Or something very much like that. All the foundrys, steel workshops and industrial activity would go somewhere else.

Seems to me that it is more than time that Dunedin took a deep breath and actually addressed its incredible level of debt, the ignored essential infrastructure and the continuing cabal of behind-the-scenes controllers. Will that happen? I’m sad to say, probably not.

Rob, you have in one article disemboweled the DCC, the DCHL, the Aurora, Delta and the DVML. It is simply a fact that the problem is an age old state of inadequacies from the top down. We, the city have been abysmally served by inadequate Mayors, CEOs, Directors and senior staff , with no understanding of underlying values nor respect. They have rushed from project to project, without so much as a thought given to just why, how, is it affordable, will it add or minus the overall status and well being of the city. It has quite frightening potential as the debt climbs, despite the entreaties of the “Gurus”.

Terry Davies has been costing Dunedin and Otago ratepayers millions of dollars since he arrived in Dunedin to ‘run the stadium’. Most of the time the stadium is devoid of excitements we want to pay for en masse. An Aussie, he’s geographically challenged anyway…. It’s uneconomical to bring “Current” world entertainment this far south – Auckland and Wellington continue to host the top international acts and sports events. With that, Mr Davies, to keep in salary, has shown fortitude and cunning by shifting sideways to ‘organise’ other Council owned venues (wow, check spirit of competition in this small town market —that takes the cake with some audacity). The equivalent of underarm bowling and sponging.

****

[thanks Council sources]

Further to Rob’s comments – while we’re told by Aurora to Look Up, Look Out…. [read: “still get fried”, because the printed diagrams require a leap of logic or one of comprehension, something most Dunedinites find tough to exercise] – underneath the radar, there is the fact that DCC was offered a piece of the ‘POL/Chalmers’ waterfront for just one dollar in recent times (so advanced and advantageous were discussions….). And DCC turned it down.

So those lucky um leaders of ours will instead Look Up to the More Expensive Version which of cource means the feting of Van Bs, together with massive massive amounts [MOAR] of Council Indebtedness, just to achieve that which a mere dollar could buy today.

I’m sorry, those contortionate white sculptural models only seem to work if they have an exqusitely rich fashion house of China to fund the prolonged if not tormented (or)deals of modelling in various scales, to satisfy the spendthrift fashionista whim.

Dunedin has iD Fashion. But is the City fashionable at all when the line facilities explode, lights go out and the sewer lines (real and publishable) go to shit. And people die.

My understanding is that DVML paid NZ Cricket “heaps and heaps and heaps of cash” to get the test played in Dunedin and the only money that Otago Cricket got out of the deal was the profits on what went through the bar in the Long Room. The possibility of making money out of the cricket test was always negative.

Isn’t that the case always Russell? NZRU take the gate for test matches as well, giving back only expenses. So where’s the profit? These premium events, seldom at best, are extremely costly if one takes into account the seat money that leaves the city. Still, again the managers can like the accountants, only count the heads, not the tails. A human failing it seems.

Thankyou Chairman Mike [Lord] for this opportunity to speak to today and my remarks are particularly related to Agenda item No.9 – DCHL Corporate Statement of Intent and the desired need of Councillors to ask hard questions in this regard and make our expectations clearly known through an appropriate Letter or Letters.

It would be fair to say that Ratepayers’ perception of its Council Companies is not a happy one given the history over the past 18 months and particularly with respect to Aurora/Delta. Thanks to a local whistle blower (Richard Healey) we know that our electrical assets are not in a good state of repair and the figure of $1B has been floated to fix it. And the cause of Aurora’s unreliability may possibly be a somewhat protracted and systematic neglect of the maintenance of the Network, driven by a run-to-fail policy where pole rot, steel corrosion, insulator and HV cable disintegration seemed to be apparent to a lot of us.

While everyone agrees the potential for a full-scale disaster for Otago ratepayers and owners of the Network still remains, it can be argued that it was totally avoidable but for the governance and management strategies that seemed to be designed to divert and misappropriate revenues away from essential network maintenance to funding the New Stadium and ventures into Land Subdivisions. While you are digesting those concerns let me remind you also that in regard to Council core debt it seems that this has only been reduced at the cost of a significant reduction in Capital Works Budgets for essential infrastructure renewals and upgrades. In the year to 30 June 2016 it was pleasing to see our core debt reduce by $13.5M; but this was gained by a cut in Capital Expenditure of $7.5M and a gain from net asset sales (property?) of $3.9M. If you study the Annual Report for 2015/16 and compare the current LTP with the 15/16 AP you will see that the areas most seriously affected by cuts in Capital Expenditure were:

So what’s the common factor that links these two concerns? I would suggest it is that Council coffers suffer from a lack of annual dividend payout from DCHL that is earned by the Companies concerned. Originally the vision of the late Richard Walls was that profit after tax would be returned annually to the Council to offset potential rate rises and our Lines Company was set up to provide the bulk of that dividend revenue flow. In recent years and since the advent of the New Stadium that arrangement has sadly changed. Under alleged pressure from past Councils and through DCHL, Aurora has been forced to pay out a subvention payment of $7M gross per year to fund the New Stadium debt to the detriment of its own Network – that’s the Ratepayer perception.

Because the DCHL Statement of Corporate Intent is up for renewal and Council input is legally required to be considered by the Board; you have a “once a year” golden opportunity to ask the hard questions and seek to rectify what many consider is a dysfunctional relationship over Governance in your ultimate and “Updated Letter of Expectation”. Not just for the Holding Company but for any other “troubled” Companies as well. The prime example for me would be to politely insist in any such letter that Aurora/Delta stick to their core business and come up with a firm timetable to renew our assets to an acceptable safe and reliable standard.

I wish you well in your deliberations and trust that you will faithfully serve the people [that] have elected you.

I recently made a LGOIMA request to the DCC for details on how DCHL and its subsidiary boards are selected. I have now received a reply to this request in the form of a policy document, given in response to an earlier request.

This policy document is so astonishing that I would invite all ‘What If’ readers to access it via the link below and leave their comment upon it. I have submitted a further request to establish if DCHL has EVER publicly advertised for directorial new blood in its secret pool.

Thank you for your response to this request. I am absolutely staggered as to the contents of this policy, which seem to amount to little more than a self-appointing and self-perpetuating DCHL board structure/community.

I have two further requests to make:

1) The identity of the council nominee that sits, on the committee outlined in clause 5.1 of the policy, or failing this the details of the process by which ‘Council’ appoints this individual and the pool of Council elected representatives or officers from which this appointee may come.

2) Information as to whether the process for recruiting potential directors into DCHL’s secret pool has ever involved ‘advertising publicly for expressions of interest (This is first on a list of four) and if so dates/nature of this advertising.

I have been informed by the chief financial officer that the process to appoint directors to DCHL has not yet begun, so there is not yet a council nominee or advertising to advise you of. If you have any further questions or wish to voice your concerns please write to the chief executive via her PA. I have copied X into this email so you have her address.

Regards

Y

Dear Y (cc X),

Thank you for your response. I am not surprised that there is no identifiable Council nominee member at present, as the committee is only formed when required. However, my questions as to the nature/specification of the qualified pool of candidates for this council nominee position and the process by which they are appointed still remain. As does the second major question with regard to whether there has ever been any attempt to recruit members to the secret DCHL directorial pool by public notification.

I’ve been led to assume it’s the mayor. Maybe now that there’s a DCC committee chair of ‘Finance and CCOs’, the political appointment might be Cr Mike Lord. And surely the ‘appointment’ would all depend on how the GOBs want to control DCC pots of money going [sideways] into private hands eg Delta.

Wed, 22 Mar 2017ODT: Irate over power-cut issues
By Vaughan Elder
A group of Wakari businesses are furious with Aurora over its lack of communication over a planned power-cut which never happened. However, Aurora has defended its communication and says a ”highly unusual” circumstance where a member of the public – reportedly on methamphetamine – interfered with workers on Saturday morning was responsible for the work in Dunedin being called off at the last minute. Cont/

### channel39.co.nz Wednesday, March 29, 2017Delta and Aurora Energy to separate
About 95 Delta employees are expected to transfer to Aurora Energy by mid-year as the two companies separate. The business divorce is one of the recommendations from an independent review by Dunedin City Holdings Limited. Delta and Aurora Energy Chair Steve Thompson says they expect no redundancies from either business. Delta will employ just over 500 staff following the transition. Aurora Energy will be a network company with network renewal as its priority, while Delta will provide electricity distribution, green-space and solid waste services.

Fri, 7 Apr 2017ODT: Safety concerns put to Aurora
By Vaughan Elder
Transpower expressed safety concerns over the way Aurora Energy used Transpower’s South Dunedin substation site. This comes as Aurora has signed a two-year lease on part of KiwiRail’s former Hillside Workshops because it required extra space for its accelerated programme to replace compromised poles across Otago. Aurora Energy and Delta chief executive Grady Cameron did not respond to questions about whether it had landed itself in hot water with Transpower over the use of its site. […] The spokeswoman [for Transpower] did not respond to a question over why it had discussions over the use of the site or a suggestion it was because Aurora and its sister company Delta had used the site for construction as opposed to just storage. Cont/